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Funding Tips on How to Successfully Raise a Series B

An article we liked from Thought Leader Auren Hoffman of SafeGraph:

10 Non-Obvious Rules to Raising a Series B

SafeGraph recently raised a $45M Series B and I have gotten a ton of inbound from entrepreneurs in similar stages for best practices.  This piece is for other entrepreneurs but also for venture capitalists who want to better understand what crazy founders are thinking.  Series B Funding

If there is one thing common across humanity, we all just want to be loved and felt loved.  

If you are looking for a spouse, my best advice is your number one criteria for a partner should be someone that truly loves you.  And if you are picking a venture capitalist to be your financial partner, find the firm that most loves your business.

So, without further ado, here are the ten non-obvious rules to raising a Series B -- both for founders and VCs...

1. Get Ready to Work REALLY Hard … Because It Will Be Hard

SafeGraph raised $45 million with a $370 million valuation.  We started pitching firms on Jan 5 and we selected a term sheet on Feb 11.  

We had a great outcome but we need to remember that this is probably the best time in history to raise money.  Anyone that tells you that raising money is easy is either completely high or lying.  It was a crazy amount of work and super intense.  Prior to the fundraise, we spent HUNDREDS of hours getting ready.  It took two months of intense work to get ready to start fundraising.  And during the fundraise (an intense six weeks) I was often doing 7 meetings a day and it was completely consuming.

2. Don’t Let the Fundraise Slow Down the Business -- That’s Your Priority as CEO

Unfortunately, I’ve seen a lot of CEOs use fundraising as another opportunity to delegate work to other employees. If there is ever a time NOT to do that, it is during a fundraising. One of your main priorities during a fundraise should be to make sure your business doesn’t slow down during this time, and for that to be true you’re going to need to do a lot of the work yourself.

You should pick a small number of people internally (three max!) to help you jump headfirst into the fundraising effort. Ideally these folks are not from teams responsible for important growth initiatives, like product, sales, or marketing. In my case, I was able to rely heavily on our VP of Operations, VP of Finance, and my executive assistant. Although this created significantly more work for the three of us, it allowed the rest of the organization to stay 100% focused on growing the business. 

As you’ll soon find out, the fundraising process can be a long and drawn out process. This is precious time that shouldn’t pull a bunch of key employees away from their main priorities. One advantage here is that if you can accelerate the business during this time, you can use it to get better terms and have more leverage to push for a fast close (more on that later).   

I did send out a weekly detailed update (with a full funnel analysis) to the SafeGraph Executive Team and to our board of directors.  That kept them in the loop and also helped them keep me accountable for my goals.  

Maybe surprisingly, a way to measure how well a fundraising went is by...

Read the rest of this article at safegraph.com...

Thanks for this article excerpt to Auren Hoffman, CEO of SafeGraph.

Photo by Monstera from Pexels

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